World View: US, IMF, EU Facing Bailout Requests from Ukraine, Greece

World View: US, IMF, EU Facing Bailout Requests from Ukraine, Greece

This morning’s key headlines from

  • Russia says Ukraine chaos is a ‘real threat’ to its interests
  • Ukraine says that it needs a $35 billion bailout
  • Bitter dispute with troika over Greece’s bailout needs

Russia says Ukraine chaos is a ‘real threat’ to its interests

Government has essentially disappeared in Kiev, the capital ofUkraine, with such functions as are available being performed byactivists who participated in the overthrow of president ViktorYanukovych, with the support of the parliament. These activistsmostly represent ethnic Ukrainians and are mostly pro-European andoften bitterly anti-Russian, blaming Russia and Ukraine’s ethnicRussians for Yanukovych’s brutal violence that killed dozens of youngactivists. The activists have issued an arrest warrant forYanukovych, accusing him of “mass killings” of civilians. 

There are reports that the parliament is considering a law that wouldremove Russian as one of Ukraine’s official languages, and some evenwant to go so far as to remove citizenship status from ethnic Russiansin Ukraine. This has sparked anti-Ukraine nationalism in Russia,where there are discussions of granting citizenship to ethnic Russiansfrom Ukraine.

On Monday, Russia’s prime minister, Dmitry Medvedev, saidthat what is going on is a “real threat” to Russia:

We do not understand what is going on there, there isa real threat to our interests and to the lives and health of ourcitizens. 

Strictly speaking, today there is no one there to communicatewith. The legitimacy of a number of power bodies is in huge doubt.If you consider people in black masks strolling through Kiev withKalashnikov rifles a government, then it will be difficult for usto work with such a government. 

Some our foreign, western partners hold the opposite opinion, theythink these people to be legitimate power bodies. I do not knowwhat constitution and what laws they have been reading, but I holdthat it is some sort of conscience aberration when you callsomething legitimate while in reality it is a result of an armeduprising.

Yanukovych has disappeared, and his whereabouts are unknown.According to some reports, he was last spotted in Balaclava, a townnear Russia’s Sevastopol naval base in Crimea on the Black Sea.According to the reports, he drove off with a 3-car convoy late onSaturday night and hasn’t been seen since. Ria Novosti and Russia Today and Reuters

Ukraine says that it needs a $35 billion bailout

Ukraine is on the brink of default, following years of massivegovernment corruption and government overspending. InDecember, Russia promised a bailout loan of $15 billion, butthat was before president Viktor Yanukovych was overthrown. 

There are some reports that Russia is considering sendingtroops into Kiev, but almost everyone considers that highlyunlikely as Russia can make Ukraine sufferfinancially without risking armed conflict. Ukraine’s economy depends heavily on naturalgas from Russia’s Gazprom. Ukraine owes Gazprom $3 billion,and Russia could cut off all gas transmissions at any time.Russia could also cut off Ukrainian exports to Russia. 

Ukraine says that it’s going to need a $35 billion bailout for 2014and 2015. It seems likely that the U.S., the IMF, and the EuropeanUnion are going to be asked to provide that bailout. Bloomberg

Bitter dispute with troika over Greece’s bailout needs

History is repeating itself as the “Troika” of organizations bailingout Greece — the European Commission (EC), the European Central Bank(ECB), and the International Monetary Fund (IMF) — are in a bitterdispute with Greece’s government over the amount of bailout moneyneeded by Greece. Greece claims that it needs only 5.5 billion euros,while the Troika has done an analysis and comes up with a figure closeto 20 billion euros. 

One reason that Greece needs more money than anticipated is becauseone of its austerity measures — the reduction of lump sum pensionpayments to civil servants — has been declared unconstitutional by aGreek court. The Troika will demand that Greece take other measuresto reduce its debts. The disagreement between Greece and the Troikais mostly internal right now, but if it’s not resolved quickly, it will become a very big, public fight. Greek Reporter and Kathimerini

KEYS: Generational Dynamics, Ukraine, Kiev, Viktor Yanukovych,Russia, Dmitry Medvedev, Balaclava, Crimea, Sevastopol,Troika, European Commission, European Central Bank,International Monetary Fund, Greece 

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